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Jefferies has been appointed as a primary dealer in UK Government bonds, the third government bond mandate the investment bank has picked up in under six months, as it continues to expand its international fixed-income sales and trading operations.

In a statement yesterday, Jefferies said the UK debt management office, which manages gilt issuance for the government, and the London Stock Exchange, has awarded its European operation gilt-edged market maker status, effective from January next year.

Becoming a primary dealer is important recognition, by governments, of a bank or broker’s ability to make markets in their bonds. Such a role has taken on greater responsibility because of the unprecedented levels of funding that western governments need to raise.

The appointment is another significant step for Jefferies as it continues to build up its international fixed-income operations, and comes after winning primary dealer status in Germany last month and in the US in June.

Tim Cronin, global head of fixed-income at Jefferies in New York, said: “We are very pleased to be appointed as a primary dealer in the UK Government bond market and see this designation as integral to our rates business”.

All the big investment banks, from JP Morgan to Goldman Sachs, have primary dealer status for most, if not all, major government bond markets, enabling them to access the flow business which is a prerequisite for success in the interest rate market.

The interest rates business, which incorporates government bond sales and trading, and interest rate derivatives such as options and swaps, is a core area of any fixed-income operation, and one that can be highly profitable.

In September, Domenico Crapanzano joined Jefferies from Dresdner Kleinwort to run its European interest rates business, while most recently, David Owen, former lead European economist at Dresdner, joined as chief European financial economist.

As result of the mandate, Jefferies International, the European operating arm of its US parent, becomes the 16th primary dealer in the UK government bond market, dealing in both conventional and index-linked, or, inflation-linked gilts, the statement said.